The much-touted Lightning Network continues to expand exponentially, as more than 22,000 channels are now providing off-chain solutions for the Bitcoin (BTC) blockchain. These numbers are encouraging, as more people sign on to the traffic congestion solution. Further, more features beyond rapid transactions are rolling out as an array of development teams each work on their own series of projects.
Over half a dozen teams are working to create the Lightning Network – a decentralized approach for the original decentralized coin. Using the off-chain aspects of the Lightning Network, they’ve begun adding features from other projects – not only scalability, but anonymity and functionality. As the Lightning Network’s reach expands, side-chain resolution may become the norm, rather than the exception.
How does Lightning Work?
As investors eagerly await another bull run, developers are hard at work behind the scenes. The start of 2018 saw unheard of price levels for many cryptocurrencies – but also exposed serious flaws in the system. As Bitcoin and Ethereum (ETH) both expanded exponentially, their respective blockchains groaned under the stress. Both suffered transactional friction that slowed transfers to a crawl – while also making them much more expensive. The leading solution for this scalability issue is Bitcoin’s Lightning Network.
Allowing for off-chain resolution of transactions, Lightning greatly alleviates the burden placed on the original blockchain. These ‘side-chains’ link users together in a series of channels. Each transaction opens a channel, and these channels remain open until intentionally closed. As more channels open, BTC can be routed through multiple users along the side-chain without validating the transaction on the blockchain itself. Once a user does decide to close their channel, all prior transactions that used their channel are validated and completed. Through this feature, Lightning does most of the work – saving the main blockchain’s resources.
The Process of Adoption
Lightning’s expansion is different from that of Bitcoin itself. While BTC only depends on a user’s desire to use digital currency, Lightning requires active participation. This does not require each individual user to join the Lightning Network consciously – but it does require the most popular wallets and software to begin integration. Luckily, for both the Lightning Network and the Bitcoin community as a whole, adoption is going well.
Ethereum, which also suffered scalability issues at the height of the boom, has a similar solution. The Raiden Network is an off-chain channel network similar to Lightning, but specifically tailored for the Ethereum blockchain. While Bitcoin is used primarily as a currency, Ethereum is often the fuel that powers decentralized applications and blockchain based games. Both require thousands of transactions between a handful of wallets – the perfect opportunity for channel-based networking to reduce traffic.
Article By: Adam Stone